Hot Stocks | Tata Motors, Cummins India, Cipla can give up to 19% return in short-term
Episode 3197, Jan 29, 2021, 12:30 AM
Nifty has been forming a lower low lower high pattern and moving lower ever since it faced rejection near the 14,753 mark.
On January 28, the index tested a low of 13,713.
The correction seems to be broad-based as the mid-cap, small-cap and most of the sectoral indices seem to be moving lower with the benchmark index.
On the open interest front, the highest participation is seen at the 13,500 Put options and 14,000 Call options. We can expect the broader range of the index to be between 13,500-14,000.
Nifty remains above the 50, 100 and 200-day SMA. The ADX is moving lower as the prices fall which points towards the weakness in the trend.
The index seems to be moving lower in a corrective form. The key support levels to watch out for in the short-term are 13,750 which is a 61.8 percent retracement level of the rise from 13,131-14,753.
It is followed by 13,478 which is a 78.6 percent retracement level of the rise from 13,131-14,753.
On the upside, the key resistance levels are 14,000-14,100. If the index sustains above this level, we might see the index head higher towards 14,450-14,753.
Currently, the index is in a corrective phase and we expect the correction to halt at 13,750 which also happens to be the 50-day SMA.
If the correction halts, we can expect the index to resume its up-move and go higher towards 14,000-14,100.